Charleston ranked #1 City in America for Economic Opportunity by Yelp

Yelp’s Local Economic Outlook: American Diners Show Increasing Taste for Independent Restaurants Nationwide

The Yelp Article from the Yelp Official Blog by Carl Bialik, Data Editor writes, "Today we’re releasing the second edition of Yelp’s Local Economic Outlook, a program to rank U.S. metro areas by the pace of growth in their local-business population. This program is part of a larger, ongoing project surfacing insights from Yelp’s deep data stores to help businesses succeed and to arm policymakers with the information they need to make effective change that can boost local economies.

The State of Restaurants in AmericaIn an effort to look more closely at the health of the restaurant industry across the country, we’ve also analyzed review ratings, an indicator of consumer sentiment, for chain and independent restaurants in the 50 metro areas included in the Outlook. (photo by @laurenutvich)

What we’ve uncovered points to a shift in consumer perception of restaurants. Apparently fueled by celebrity chef-owner obsession in popular media and increased consumer confidence in non-chain restaurants because of review platforms like Yelp, there has been a tremendous rise in independent restaurants over the last five years.

Fast-food chain restaurants have seen a notable decrease in average ratings over the last five years, by about one-third of a star, on a scale of 1 to 5 stars — equivalent to a loss of about 16 percent of their average rating. Similarly, fast-casual chain restaurants have experienced a decline in ratings, by about one-tenth of a rating point on average between 2012 and 2017.

While chain restaurants across the country encounter increasingly choosy diners, independent fast-food and fast-casual restaurants have seen a continued increase in average ratings, improving by 7 percent in the last five years. Ratings for casual-dining chain restaurants held up better, unchanged on average, though they lagged behind their independent competitors, which gained a quarter of a rating point between 2012 and 2017.

“Historically, chain growth has outpaced the broader restaurant industry growth, but in the past three years we’ve actually seen independents and smaller operators outperform chains,” said Dave Henkes, Senior Principal at food industry research firm, Technomic. “It’s clear that consumers are voting with their dollars and are rewarding those restaurants that provide a resonating point of difference in the overall experience.”

While these trends are national in scope, there is some notable variation in specific cities. For example, chains have continued to perform well in Portland, Maine, while independent restaurants have extended their lead over chain competitors in consumer sentiment in Cincinnati and Denver.

“Consumers are embracing local in all aspects of their lives, and this includes the restaurants they visit,” Henkes said. “Consumers tell us that smaller, independent restaurants are more authentic, offer better and more unique menu items, align more closely to consumer needs, and provide better value than their chain counterparts.”

While many people might associate the phrases “fast food” and “fast casual” with chain restaurants, many restaurants that provide that type of experience are independent. Again there is significant variation. For example fewer than one-quarter of fast food restaurants in Cincinnati and Phoenix are independent, while nearly two-thirds are in New York City. Nationwide, most fast casual restaurants are independent.

“The key to success in the restaurant industry today is having a unique and defining point of differentiation,” Henkes said. “For too many chains, this differentiation has been lost – and is an area that smaller, independent restaurants excel at.”

Charleston, S.C., Leads The Country In Local-Business GrowthThe Outlook ranks 50 U.S. cities by local-business investment and success to reveal the health of urban economies around the country. We measure local-business success by the rate of change of the business population in each city’s metro area in the fourth quarter of 2017. Cities where openings greatly outnumber closures are ones where business owners have spotted opportunity and found success.

In the fourth quarter of 2017, Charleston, S.C., topped the list. In recent years, the Charleston region’s economy has been growing much faster than the national average. Construction is a main driver of this growth, fueled by rapid population growth and a recent real estate boom. Meanwhile, San Jose, Calif., had the lowest rate of change in number of local businesses, reflecting the tough business climate — sky-high rents and resulting pressure on wages — in and around Silicon Valley.

Scroll down to see the top five metro areas in the U.S for business growth, featuring a newly opened, highly rated restaurant in each metro.

Charleston, S.C., Leads The Country In Local-Business GrowthThe Outlook ranks 50 U.S. cities by local-business investment and success to reveal the health of urban economies around the country. We measure local-business success by the rate of change of the business population in each city’s metro area in the fourth quarter of 2017. Cities where openings greatly outnumber closures are ones where business owners have spotted opportunity and found success.

In the fourth quarter of 2017, Charleston, S.C., topped the list. In recent years, the Charleston region’s economy has been growing much faster than the national average. Construction is a main driver of this growth, fueled by rapid population growth and a recent real estate boom. Meanwhile, San Jose, Calif., had the lowest rate of change in number of local businesses, reflecting the tough business climate — sky-high rents and resulting pressure on wages — in and around Silicon Valley...."

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